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Planning portal: Office to residential conversion

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Government efforts to increase house building will have wide-reaching effects on the market, writes Karen Jones

Seeking to address the low rate of house building, the government has proposed new change of use rights for converting commercial property into residential. The proposals have recently come under consultation, but in their current form they would have wide-reaching effects on the housing and commercial property markets, as well as the shaping of communities.

The consultation document asked for feedback on three new possible permitted development rights. The first is a change of use from B1, which includes offices, research and development premises and light industry, to C3 homes. Secondly, a change of use from B2, which are general industrial properties, and B8, storage and distribution, into C3 homes.

Lastly, greater flexibility to convert unused space above shops into residential property. If implemented, these changes would not remove the need to obtain planning permission for any operational development on the project, such as building work and exterior changes.

In a buoyant residential market, the proposals could well result in a shortage of available commercial floorspace, given the profit to be made from converting commercial properties to residential. Businesses looking for new commercial premises or involved in rent reviews could find themselves struggling to find appropriate accommodation. Possible limits to these change of use rights have yet to be seen, but could mean reserving some level of approval for the local planning authority. Businesses who find themselves next to newly converted sites may also find they face complaints from residential neighbours regarding noise, traffic or other issues, despite being aware when they moved in that they would be living next to commercial premises.

Residential conversions may begin to pop up on our high streets and in central business districts, drastically changing areas with a high concentration of commercial premises. This in turn may lead to commercial premises relocating further afield, which could significantly shape communities in the future.

At present, planning permission is required for the development of land, which includes both operational development and a ‘material’ change of use. Whether or not a change of use is ‘material’ will be subject to case-by-case review. At present, planning permission is required to convert a commercial property into residential use, and those in the industry will be aware that this process can be time-consuming and involves a significant financial outlay, even before the cost of carrying out the development is taken into account.

In some cases however, change of use does not require specific planning permission as it is ‘permitted development’, as set out in the Town and Country Planning (General Permitted Development) Order 1995. This order allows change of use between certain types of activity. Change to a use within the same ‘use class’ (as set out in the Town and Country Planning (Use Classes) Order 1987) benefits from permitted development status, meaning no application is required. This is because planning considerations within the same use class are expected to be similar. In addition, Part 3 of Schedule 2 to the Permitted Development Order also grants permitted development rights for change of use between certain use classes.

The aim of the proposals is to increase the available housing stock and to address the gap between the rate of house building and public demand. Making more housing available will inevitably impact upon the market value of all residential property. Those with a vested interest in the success of the UK property market, be they developers, contractors or architects, will be keeping track of the developments and anticipating the government’s response to the consultation.

Karen Jones is head of the Planning and Environment department and partner at Blandy & Blandy solicitors

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